Leaders must lead by their own example. If subordinates see their leader doing one thing and saying another, they may follow the letter of the law and obey what is said without really following the spirit behind what the leader is trying to accomplish. Not following the spirit behind a rule can result in a very large loss in efficiency.

Leading through example is leading through intent not through directives. When people hear you say to do something they may follow what you say, but that is much less efficient than when they follow what you mean. By following your intent, your subordinates will be much more productive and much more aligned with your vision than if they just follow what you say word for word.

There was a CEO of a large company that was having a problem with parking. He told everyone they needed to park in a lower lot to give customers more space to park. By parking in his old spot, employees saw that he was following a different standard. While they followed the letter of the law, they didn't follow the concept behind what the CEO was trying to say about putting the customer first.

In a similar situation the president of a large university had a parking space near the building where she worked. Students had to park at the bottom of the hill and ride a bus to the campus. Several times a week, students found that they were riding on the bus with the college president because she wanted to park where the students were parking so she could make sure she understood how they had to park and get to school.

Students had a great deal of respect for the college president because she was following her own rules even though she didn't have to. The students felt like she valued them and as a result put a great deal of effort into helping the university succeed.

When you are able to lead through example, you show people the way to act and think. Showing people is much better than telling them. When you tell someone they will only understand a small percentage of what you said. When you show them they will understand not only what you meant to say, but the intent behind what you would have said. When people see you leading the way they can put their entire effort behind your intention and not feel like they have to reserve part of themself because you are trying to take advantage of them.